The central bank executed its third consecutive interest rate reduction, totaling 0.75% across three months from September through December.
Bitcoin News
Bitcoin and crypto markets recovered following the Federal Reserve's rate cut on Wednesday, with analysts predicting a more substantial bounce ahead based on historical patterns.
The central bank executed its third consecutive interest rate reduction, totaling 0.75% across three months from September through December. Each previous cut triggered short-term sell-offs despite long-term bullish fundamentals, following a classic "buy the rumor, sell the news" pattern according to on-chain analytics firm Santiment.
Markets typically bounce after initial volatility settles, creating predictable trading opportunities. "Thus far, this latest rate cut has been no different. Look for a slight level of FUD or retail sell-off to indicate that the mild post-cut downswing has ended," Santiment stated Thursday.
Lower rates and cheaper borrowing costs generally increase risk appetite and capital flowing into speculative assets like cryptocurrencies. CoinEx Chief Analyst Jeff Ko told reporters the Fed's latest reduction was widely expected and largely priced into markets. However, the updated dot plot showing future rate projections leaned slightly hawkish.
The $40 billion short-term Treasury purchases represent a technical maneuver for financial system liquidity rather than large-scale stimulus, Ko explained. Markets interpreted this as mildly bullish, with U.S. stocks moving higher and helping Bitcoin stage a rebound alongside broader risk sentiment.
Fidelity Investments' Director of Global Macro Jurrien Timmer examined longer timeframes on Thursday, noting Bitcoin has underperformed stock markets this year. He suggested markets were maturing compared to previous cycles.
"It's hard to tell in real time whether a new crypto winter is upon us, but looking at the evolving wave structure of Bitcoin's maturing network curve, we can see that the most recent bull market looks pretty mature," Timmer stated.
Crypto markets saw slight upticks during Friday morning trading. Bitcoin recovered from its post-cut dip below $90,000 to spike at $93,500 on Coinbase. Resistance at this level proved too strong once again, sending the asset back to $92,300, where it currently trades.
The pattern of post-cut rebounds has held consistent across previous Federal Reserve policy shifts. Analysts tracking these movements suggest watching for retail selling pressure to identify when the downswing ends and the recovery bounce begins.
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